Gulf African Bank (GAB), one of Kenya’s three fully-fledged Islamic banks, has partnered with telecoms company Safaricom to launch Halal Pesa, a Shariah compliant mobile financing solution.
Through the new service, customers can access Islamic financing with a repayment period of 30 days and a commodity Murabahah rate of 5%. The minimum facility amount that can be requested is KES1,000 (US$8.63).
The Halal Pesa service rides on M-PESA, Safaricom’s mobile phone-based money transfer, payments and microfinancing platform. M-PESA customers will initially be provided with a custom facility limit based on their usage of M-PESA. It is currently offered as a financing product only, without a savings functionality which will be introduced later, GAB clarified.
“Kenya is now a highly innovative, interconnected and fast-paced community that requires solutions on the go,” Abdalla Abdulkhalik, the managing director of GAB, noted. “… Our aim is to provide instantaneous access to interest-free credit through Halal Pesa.”
Halal Pesa is said to be the first Shariah compliant mobile and digital financial solution in the East African nation, which has been in the past year pushing for more Islamic finance products to cater to its 11% Muslim population.
In 2021, Islamic fintech company Hal Capital partnered with supply chain platform Dukaree to offer instant financing to the latter’s customers, and the year prior to that, the Kenyan parliament amended rules to accommodate Shariah compliant microfinance products.